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Brazil’s inflation outlook for 2022 exceeds the official target for the first time: Focus

BRASILIA, Apr 19 (Reuters) – Brazil’s inflation outlook for 2022 rose above the central bank’s official target for the end of the year for the first time, while the forecast for economic growth fell for the seventh consecutive week, it showed on Monday. a survey among economists.

The median forecast for inflation in 2022 from more than 100 economists – surveyed by the Central Bank in the “Focus” study each week – rose to 3.6% from 3.5%. The Central Bank’s inflation target for the end of the year is 3.5%, with a margin of error of 1.5 percentage points.

The head of the Central Bank, Roberto Campos Neto, defended last week the planned strategy of raising interest rates aggressively at the beginning of a cycle of monetary tightening, in order to avoid raising rates too much at the end of the curve and keeping interest rates contained. inflation expectations for 2022.

“There is always the risk that short-term inflation will begin to contaminate the final leg of the curve and that is why we have decided to move (raise the rate) earlier than the market expected. The faster we act, the greater the will be. efficiency at the end of the cycle, we will need to do less, “he explained.

The Focus survey’s median forecast for inflation in 2021 remained unchanged at 4.9%, still above the central bank’s target of 3.75%.

But as the COVID-19 pandemic progresses and the vaccination process faces delays, consumer and business confidence continues to decline. The median estimates of economic growth this year fell for the seventh consecutive week, 3% from 3.1%, according to the survey.

The official forecast of the Central Bank on GDP expansion for 2021 is 3.6%.

(Reporting by Jamie McGeever. Edited in Spanish by Marion Giraldo)

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